Operations with letters of credit executed by BPS-Sberbank:
letters of credit with transfer of cover
The cover (funds for execution of settlements under the letter of credit) shall be transferred by the customer not later than the date of issue of the letter of credit.
letters of credit without transfer of cover (financing before shipment)
The cover (funds for execution of settlements under the letter of credit) shall be transferred by the customer not later than the date of payment under the letter of credit. No transfer is required on the date of issue of the letter of credit. ;
The letter of credit where both the issuer bank and the beneficiary are residents of the Republic of Belarus. /
One of the parties to the settlements under the letter of credit is a non-resident of the Republic of Belarus.
letters of credit;
The letter of credit where the obligation to pay to the beneficiary is assumed, along with BPS-Sberbank, by a foreign (confirming) bank. The confirmed irrevocable letter of credit is intended to improve reliability of payment, because the payment obligation of the bank that issued the letter of credit is enhanced by the payment obligation of another bank that confirms the letter of credit.
The letter of credit where only the issuer bank (BPS-Sberbank) is responsible for making payment to the beneficiary.
letters of credit;
letters of credit with red clause
‘Red clause’ is a special benefit for the seller. It allows the executing bank to pay a part of the amount under the letter of credit to the seller as an advance payment for preparation of the goods. Earlier such a clause was written in red ink, hence is the name.
To be applied when the beneficiary is a commercial agent, not the supplier directly. In case of transferrable letter of credit, the commercial agent can transfer its right to receive a part of the funds under the letter of credit to any supplier, and thus execute the transaction with limited usage of own financial resources.
letters of credit;
Standby letters of credit are mainly unsed in foreign trade transactions with countries where bank guarantees are forbidden in trade transactions (e.g., the USA), or if the issue of a standby letter of credit is stipulated by the transaction terms.
letters of credit.
Financing of payments under the contract with the use of the letter of credit
Financing of settlements under the contract with the foreign supplier is arranged under the letter of credit.
Payment under the letter of credit in favour of the foreign exporter is made by a foreign bank which provides payment deferral/ postfinancing to BPS-Sberbank which, in its turn, provides payment deferral/ loan to its customer.
Up to 5 years
- Companies purchasing goods abroad for their sale in Belarus;
- Companies purchasing raw materials and parts abroad for further use in the production process;
- Companies purchasing machinery and equipment of foreign origin;
- Companies carrying out modernization and technical re-equipment of their production facilities.
For the buyer:
- Possibility to avoid advance payments;
- Assurance that payment will be made against actual fulfillment of the terms of the letter of credit by the seller (dispatch of the goods, provision of shipment documents confirming dispatch of the goods and fulfillment of other terms of the letter of credit);
- Guarantee of shipment of the goods of due quality and completeness within the term stipulated by the contract;
- Thorough professional verification of the documents under the letter of credit by the banks.
For the seller:
- Guarantee of payment for the shipped goods/ provided service in case of presentation of compliant documents to the bank in conformity with the letter of credit;
- Short term of receipt of export proceeds;
- Expansion of sales markets.
- Financing at attractive rates of the international market (tied resources of foreign banks);
- Reduction of commercial, foreign exchange and financial risks under transactions with foreign suppliers;
- Wide choice of financing instruments and schemes of attraction of foreign resources;
- Flexible options of refinancing and additional lending from own funds of BPS-Sberbank for 5 years and over;
- Full support of the transaction, from preparation of the draft of the letter of credit, proposal on the settlement terms (in the respective foreign trade contract) and assistance in submission of the application for issue of the letter of credit, and through negotiations with the counterparty in case of any problematic issues;
- Long-term experience of cooperation of BPS-Sberbank with the leading foreign financial institutions:
- Participation in main international trade finance programs (including programs of the European Banks for Reconstruction and Development and International Finance Corporation);
- Wide opportunities of confirmation and financing of letters of credit of Sberbank Group;
- Cooperation with main European export credit agencies;
- Possibility of financing under beneficial rates in case of purchase of energy efficient equipment (under the program of International Finance Corporation).
- Present the foreign trade contract with attachments, amendments and supplements, stipulating issue of the letter of credit, to the respective regional directorate (banking service centre) of BPS-Sberbank (draft of the contract);
- Present the application for arrangement of the deal in a free form in case of necessity to add confirmation to the letter of credit, to the respective regional directorate (banking service centre) of BPS-Sberbank;
- Present documents for analysis of the financial condition to the respective regional directorate (banking service centre) of BPS-Sberbank;
- View the fee rates (ссылка) of BPS-Sberbank for execution of transactions with letters of credit.
- Provide the respective security to BPS-Sberbank (type of security and its volume are considered on a case-by-case basis);
- After adoption of the positive decision on issue of the letter of credit (only without transfer of cover) by the collective management body of BPS-Sberbank, fill in the application for issue of the guarantee) and send that document to the respective regional directorate (banking service centre) of BPS-Sberbank;
- Conclude an agreement on the issue of the letter of credit with the respective regional directorate or banking service centre and pay fees of BPS-Sberbank upon issue of the letter of credit;
- The amount of fee for issue of the letter of credit is set for each Customer on a case-by-case basis depending on the financial condition of the Customer, the term of validity of the letter of credit, and other factors.
To consider a possibility of the letter of credit issue, please address BPS-Sberbank’s offices (regional directorate/ banking service centre).